Government Data: What Could Happen If the U.S. Transitioned to the Highest Efficiency Energy-Related Equipment?

Every year the U.S. Energy Information Administration releases an Annual Energy Outlook, which presents an objective examination of energy trends and serves as a starting point for the media and policy community’s analyses of U.S. energy regulations.

The American Petroleum Institute (API) has developed an interactive tool that combs through the data from 2014 and 2015 reports and lets users select hypothetical energy scenarios and visualize their effects in easy-to-interpret charts and graphs -- sort of a “Choose Your Own Adventure” for energy policy.

What could happen if all energy-related equipment in the U.S. was replaced with the highest-efficiency models when it reached the end of its useful life? EIA’s annual report answers this question, by simulating a situation in which consumers and businesses choose all equipment purchases from only the most efficient models available for the kind of product they need. The result could be a fascinating transition that would harness the ingenuity of technology and manufacturing firms to reduce carbon dioxide emissions substantially, cutting the amount of energy used per household by 37 percent over the next fifteen years.

Coal consumption drops, and natural gas consumption goes up

This chart, created using EIA’s tool, shows how energy consumption in 2040 will be lower for every energy category if individual consumers and businesses always choose the best available, most efficient technology (shown in green). As Google and Facebook have revolutionized the way we look at information and companies such as Apple have changed the ways we work and play, companies such as GE and Nest (manufacturers of smart thermostats, now owned by Google) are changing how we use energy, saving Americans money and improving the environment.

In 1927, GE revolutionized how people thought about food by introducing the first electric refrigerator. The ability to store perishable food safely at home made American kitchens far more flexible. However, the refrigerator uses a lot of electricity - more than all other kitchen appliances combined, and second in the home only to central air conditioning. GE has recently developed a new technology to use magnetic fields and water to cool the refrigerator. Refrigerators employing this technology use 20 percent less energy than those in widespread use today. Innovations like this could improve the biggest drains on home energy heating, cooling, and lighting - and drive consumption savings in the coming decades, as pictured in the chart above.

2040 carbon dioxide emissions would be lower than today

This chart, generated with API’s interactive tool, shows the stark reduction in carbon dioxide (CO2) emissions that choosing the most efficient equipment in every case would create over the next few decades. If Americans don’t move to adopt more efficient technology quickly, emissions levels are projected to continue to increase over the next two decades. EIA forecasts that if market conditions incentivize production and use of highly efficient equipment over the coming decades, in 2040, CO2 emissions in the United States will be lower than today’s levels -- at levels consistent with about 1994 -- despite the fact that the economy will be several times bigger in 2040 than it was in the 1990s.

These emissions reductions are the result of equipment manufacturing industries reducing power consumption of every type of device. Emissions will go down because equipment manufacturing industries will focus on decreasing the amount of energy necessary to power their devices. For example, the makers of set-top boxes for the cable industry created a voluntary agreement to reduce the amount of power their devices needed. The industry took this initiative in an effort to create standards that would be stronger and more effective than potential government regulation, and the result was a plan to reduce power consumption by enough to render 3 average-sized (500 MW) power plants unnecessary, keeping 5 million tons of CO2 out of the air every year. Similar agreements are spreading through other consumer electronics industries, including televisions and wireless systems.

Advanced technology puts a lid on energy prices

Adopting new technological innovations can affect energy prices, too. EIA forecasts that if the best available technology is always used, electricity prices will be 10 percent lower than they would otherwise be, and American households will spend $106 less per year on heating come 2040 (it’s important to note, however, that EIA does not include the initial cost of purchasing smarter technology, like a Nest thermostat, in its modeling -- a Nest thermostat retails at Home Depot for $249 while a basic thermostat sells for around $100). The drop in energy prices most likely occur because new equipment for commercial and residential settings can also be applied to industrial and power producing sites, increasing their efficiency and lowering operating costs. Breakthroughs in battery technology would also enable more efficient use of renewable resources. Finally, new appliances will ‘talk’ to the power grid, negotiating ways to use less electricity and return surplus energy to the grid, which will make a seamless approach power generation and use and save everyone money.